4G cell phones: Don't hold your breath

It’s one of the things iPhone owners and those holding out to buy the device have been clamoring for: 3G, or third-generation wireless development, which basically allows for faster Web surfing.

Indications are 3G is coming to the next version of the iPhone, now 2.5G, possibly in a few months. But it’s 4G, the next generation, that’s on the minds of many at CTIA-The Wireless Association’s annual conference this week in Las Vegas, and is on the industry trade show’s agenda.

Among the 4G issues are what tech standards should be used for it, how existing cell systems can be “backhauled” to put it into effect, and at what cost to network operators — and ultimately — customers.

“Discussions in 2008 tend to get people a little too keyed up about what will happen in 2009,” said David Chamberlain, principal analyst covering wireless for In-Stat research.

“The reality is, even after you have an accepted standard for a wireless network, it’s at least four or five years before anyone starts using it on a commercial basis.”

In the United States, he said, sales of 3G phones “have just topped 50 percent,” with the remainder being 2.5G or 2G phones.

“The networks aren’t built out yet,” for 3G, he said, and, so far, less than half of cell customers whose phones are equipped for 3G are using its capabilities.

Cost factor is an issue
Part of the reason is cost. Data plans, for e-mail and Web use, add to a cell customer’s monthly bill by at least $30 to $60 and often more, depending on usage.

While AT&T, Verizon Wireless and T-Mobile USA recently announced $100-a-month unlimited calling plans, those plans are not unlimited when it comes to data usage.

Sprint Nextel, which has been losing subscribers, not only matched the deal, but threw in unlimited e-mail, text messaging and Web browsing.

In a time of slowing cell phone sales, monthly costs are an issue, and may be a deterrent to a push to create 4G phones.

A recent comScore Wireless Report surveyed 2,000 U.S. cell phone users from Feb. 20 to March 5, and found that compared to a similar survey in fall, 2006, “consumers’ focus on price has increased, while coverage (quality/range) does not have the commanding lead it once had as a factor.”

However, the survey also found that of those mobile Internet subscribers, 36 percent are using that service more than once a day, compared to 18 percent in 2006.

Speeds of different generations
In terms of speed, 2.5G can offer Web access at a rate of between 144 and 384 kilobits per second.

3G is even faster. Verizon Wireless’s 3G, EV-DO Rev. A technology, for example, is billed as offering transmission rates of between 500 kilobits per second and 1.4 megabits per second. The reality might depend on whether a cumbersome file, like a video, is being downloaded, or a simple text e-mail is being sent.

4G holds the promise of routinely delivering the higher end of that transmission rate, and much faster, in some cases, up to 100 Mbps for downloading, and 50 Mbps for uploading.

“Most of us haven’t tapped the capabilities of 3G yet,” said Avi Greengart, Current Analysis’ research director for wireless devices.

“The big thing that 3G and 4G will bring, with faster upload speeds, is enabling richer social networking and plain, old Web browsing,” he said. “Those are likely to be the applications that really drives some of this, in terms of consumer usage.

“If you take a video with your camcorder phone now, uploading that to a social networking site is rather painful,” in terms of the time it takes. “That’s where faster speeds really make a difference,” he said.

Differing over technology, standards
Part of the issue with 4G among phone companies and engineering gurus is that there is not agreement about what 4G technology and standards should be.

Included in 4G’s acronym soup of technologies are LTE (Long-Term Evolution) WiMax (Worldwide Interoperability for Microwave Access, a faster Wi-Fi standard) and UMB (Ultra Mobile Broadband).

Sprint Nextel plans is doing limited testing of Xohm, its WiMax-based 4G network, in Washington D.C., Baltimore and Chicago. AT&T and Verizon Wireless, which favor LTE, are expected to launch 4G networks “in the next couple of years,” Greengart said.

The market for smartphones, such as the iPhone, BlackBerry and Treo, which offer e-mail and Web access, will grow from around 10 percent of the cell market in 2007 to 31 percent in 2013, according to a new study from ABI Research.

It’s a bright spot in an otherwise tepid cell phone market, where the growth rate is starting to slow.

“It took a long time for 3G handsets to get to the point where they were competitive with 2G-type phones,” said Fred Wright, Motorola’s senior vice president who oversees cellular networks and WiMax, in a recent interview about 4G with FierceWireless.com.

“That clearly comes from volume and scale. It’s a chicken-and-egg scenario. It takes time to deploy these technologies, and someone ultimately has to pay the higher price for devices. Once you get the volume, you see the prices come down to volume and scale economies. That is natural with any consumer electronics device.”